A good board of directors can help a company run its operations more efficiently. However, finding the right people for your board can be difficult. You should prioritise not just having a great board that is diverse but also has technical expertise. The degree to which technology distinguishes a company from its competitors can be measured on a sliding scale. On the one hand, technological advancements and improvements simply ensure that a company "stays in the game," whereas on the other hand, technology serves as a critical source of value creation and enhancement. In this blog post, we'll look at why technical expertise is one of the most important qualities to look for in board members.
Today's world is becoming more digitised and technologically oriented. To be successful, boards must have strong technical experts in fields relevant to the organization's goals. Too many organisational leaders today lack this technical knowledge, making it difficult for them to deal with technological changes. As disruptive changes occur at an increasing rate, having highly tech savvy members added to a company's board of directors is no longer an option, but rather a requirement.
In this day and age, it is critical to understand technology as it relates to the projects and organisations that we are working on. According to a McKinsey research, an alarming 43 percent of directors on S&P 500 boards do not consider themselves well informed about digital developments, which means they won't be able to fully understand what's going on. This lack of knowledge may cause them to make mistakes in their decision-making processes, particularly when determining how much a company is worth or who its competitors are, among other things. Only 6% of the directors who oversee the world's largest banks have any technology experience. This figure, from an Accenture report, is surprising given how digitalized the banking industry is becoming. However, banking is not the only option. Technology is changing the rules of business and reshaping industries in almost every industry.
A number of businesses have brought on board individuals capable of taking their brand to the next level and beyond. In order for this to happen, a company must have innovative ideas as well as people who can put these ideas into action. Kevin Systrom, co-founder of Instagram and member of the Walmart board of directors, is one example. Similarly, Margret Georgias, Google's president for Americas, also serves on the board for one of the world's largest fast food corporations, McDonald's. The inclusion of tech-savvy board members is not limited to large corporations; companies of all sizes can benefit from advanced technological knowledge.
Companies must hold out for at least a few candidates in the tech field rather than simply doing it as a “checking the box” exercise. It is necessary to create multiple board seats for people with technological experience and to look beyond the traditional tech targets of former CEOs. When it comes to spreading their tentacles into the corporate world, it is also recommend that companies consider CTOs and CIOs as options. Finally, once a few qualified individuals in the technological department have been assembled, it is critical to ensure that one's board of directors supports robust discussions about technology that is specifically relevant to your company.
With the ever-changing technological landscape, having a tech expert on your board of directors can not only help you stay current with the latest trends, but it can also help your company stay secure. We hope you now fully understand why your board of directors requires technical experts.
If you have technical expertise that you believe would make a significant difference to organisations and companies, become certified as an Independent Director and join the boards of well-known companies to share your technical knowledge.
Join the Directors’ Institute to become certified and learn more about corporate governance. Register at the link below to begin your journey to becoming an Independent Director.